diff --git a/changelog/fix_indentation_in_class_and_module_children.md b/changelog/fix_indentation_in_class_and_module_children.md
new file mode 100644
index 00000000000..05b4e0abbec
--- /dev/null
+++ b/changelog/fix_indentation_in_class_and_module_children.md
@@ -0,0 +1 @@
+* [#9886](https://github.com/rubocop/rubocop/pull/9886): Fix indentation in Style/ClassAndModuleChildren. ([@markburns][])
diff --git a/lib/rubocop/cop/style/class_and_module_children.rb b/lib/rubocop/cop/style/class_and_module_children.rb
index 063661192f9..52a5123e639 100644
--- a/lib/rubocop/cop/style/class_and_module_children.rb
+++ b/lib/rubocop/cop/style/class_and_module_children.rb
@@ -84,6 +84,7 @@ def add_trailing_end(corrector, node, padding)
         def compact_definition(corrector, node)
           compact_node(corrector, node)
           remove_end(corrector, node.body)
+          unindent(corrector, node)
         end
 
         def compact_node(corrector, node)
@@ -114,6 +115,19 @@ def remove_end(corrector, body)
           corrector.remove(range)
         end
 
+        def configured_indentation_width
+          config.for_badge(Layout::IndentationWidth.badge).fetch('Width', 2)
+        end
+
+        def unindent(corrector, node)
+          return if node.body.children.last.nil?
+
+          column_delta = configured_indentation_width - leading_spaces(node.body.children.last).size
+          return if column_delta.zero?
+
+          AlignmentCorrector.correct(corrector, processed_source, node, column_delta)
+        end
+
         def leading_spaces(node)
           node.source_range.source_line[/\A\s*/]
         end
diff --git a/spec/rubocop/cop/style/class_and_module_children_spec.rb b/spec/rubocop/cop/style/class_and_module_children_spec.rb
index 03ee4027021..3f998f1aed6 100644
--- a/spec/rubocop/cop/style/class_and_module_children_spec.rb
+++ b/spec/rubocop/cop/style/class_and_module_children_spec.rb
@@ -210,12 +210,43 @@ class FooClass::BarClass
         module FooModule
                ^^^^^^^^^ Use compact module/class definition instead of nested style.
           module BarModule
+            def method_example
+            end
           end
         end
       RUBY
 
       expect_correction(<<~RUBY)
         module FooModule::BarModule
+          def method_example
+          end
+        end
+      RUBY
+    end
+
+    it 'correctly indents heavily nested children' do
+      expect_offense(<<~RUBY)
+        module FooModule
+               ^^^^^^^^^ Use compact module/class definition instead of nested style.
+          module BarModule
+            module BazModule
+              module QuxModule
+                CONST = 1
+
+                def method_example
+                end
+              end
+            end
+          end
+        end
+      RUBY
+
+      expect_correction(<<~RUBY)
+        module FooModule::BarModule::BazModule::QuxModule
+          CONST = 1
+
+          def method_example
+          end
         end
       RUBY
     end